Is Opec+ carrying out a reset, a rebound or a revolution? By the middle of next year, we will have a clearer idea of which of the three Rs it favours – but that is a long time to wait. Even the ministers and strategists who meet in their virtual Vienna may not be sure, but deciphering the question is crucial to the oil exporters’ diverging prospects.
This month, the extended Opec+ group agreed to start easing the next 1.65 million barrels per day tranche of voluntary cuts. These were made by an eight-member subset of the leading producers: Saudi Arabia, Iraq, the UAE, Kuwait, Russia, Kazakhstan, Algeria and Oman. They had already eliminated the first of 2.2 million barrels of these voluntary cuts the month before.
Now, from October, allowable production will increase by 137,000 bpd. If this were repeated each month, then after a year, the second tranche will be eliminated. That would leave only the third set of cuts, totalling 2 million bpd, chronologically the first made, which date from October 2022. Unlike the voluntary cuts, these were binding on all Opec+ members, except three exempt for political reasons – Iran, Libya and Venezuela.
In case this simplification might make the sums too easy for analysts, it is complicated by the revision of “compensation cuts”, through which some countries are meant to fill in for overshooting. Most of this falls on Kazakhstan and Iraq, and to a lesser extent, the UAE and Russia. The latest update largely defers this compensation to next year.
If taken literally, the new compensation schedule would actually reduce production from Opec+ next year, even accounting for the latest permitted increase. But no one really expects Kazakhstan to follow through.
These production increases have been a success, from the point of view of Opec+. The group announced the first step of its more aggressive easing policy just hours after US President Donald Trump’s April 2 tariff headline had brought down oil prices sharply. Since then, prices are actually up slightly. Production from the group of eight has increased almost 4.5 per cent from April to August, translating to an overall revenue gain.
Stronger than expected demand, and, probably, large gains in Chinese inventories, have helped soak up any surplus. That could change in the fourth quarter, as Middle Eastern oil consumption for power drops, permitting higher exports, while demand generally is expected to soften. The International Energy Agency sees a fourth-quarter glut as high as 3.1 million bpd, although that is not apparent in the data yet.
The next moves by Opec+ will show what approach it has in mind: reset, rebound or revolution. In the case of reset, it will continue to increase allowable production month by month, and monitor the market. By next June, it would have worked off all the voluntary cuts. The real oil flowing to market will be much less than the headline 1.65 million bpd, perhaps half that, as several members of the group of eight hit the limits of their capacity.
Saudi Arabia could then seek a general realignment of production baselines. These date from October 2018, with a few adjustments, and have become ever more outdated. The group has already planned for an independent consultancy to assess real production capacities, to inform new baselines in 2027. Nevertheless, such a reset will be very controversial.
The UAE, Iraq and Kazakhstan would expect substantial increases because of their investment in new capacity – but why should Kazakhstan, which has heavily overproduced, be rewarded? If the heralded oversupply arrives and Opec+ then decides on an overall cut in output from its new, higher level, others would have to give some ground. Riyadh will not want to bear the burden again, so to have an impact, reductions would have to come from other large producers, notably Russia.
The required consensus could be achieved in three ways. A period of low oil prices, say below $60 or even $50 a barrel – would convince waverers that a new framework for cuts was required. To sustain oil prices to fund its continuing war, Moscow might have to concede on production levels. Or, the end of the voluntary cuts would reveal who can live up to their production targets, and who cannot. Alternatively, stiffer sanctions on Russian oil or intensified Ukrainian attacks might finally cut its exports substantially.
Outside the group of eight and the exempted three, the other Opec+ adherents are mostly small producers without spare capacity. The main exception, Nigeria, has enjoyed a good year and might have a case for a stronger baseline. Libya, though exempt, could also prove tricky if its recent period of relative stability in the oil sector persists, and if it is able to mobilise its planned production gains. Can it remain outside the baseline system indefinitely?
The rebound case would result in Saudi Arabia and its main allies recovering market share to around the 2022 level, before the two big wedges of voluntary cuts were made. That might come at the cost of significantly lower prices next year, depending on the trajectory of the global economy. Production would be set ad hoc as it becomes clear who really has spare capacity.
The revolution scenario is the most intriguing. The leading lights in Opec+ would make a sustained push for higher output levels and gaining – not just regaining – market share. They would move to eliminate not only the voluntary cuts, but the remaining 2 million bpd of group-wide reductions. Of course, that would mean prices dropping substantially, probably to below $50 a barrel.
Such a strategic shift would aim to moderate inflation and hence prop up economic growth in the short term. In the longer term, it should sustain oil demand, and squeeze out competing supply. US shale production could be deterred during the next year. But it would take some years to diminish the longer lead-time output from countries such as Canada, Brazil and Guyana. A bigger impact might be within the Opec+ group itself, by starving budgets for more costly projects.
Opec+, and within it Opec, have generally moved flexibly, both anticipating and reacting to market developments. The group still faces all the difficulties of co-ordinating a disparate group of countries. Whichever of the three Rs it opts for, all the key members need to see that the sums add up.
Defined benefit and defined contribution schemes explained
Defined Benefit Plan (DB)
A defined benefit plan is where the benefit is defined by a formula, typically length of service to and salary at date of leaving.
Defined Contribution Plan (DC)
A defined contribution plan is where the benefit depends on the amount of money put into the plan for an employee, and how much investment return is earned on those contributions.
Racecard
6pm: Mina Hamriya – Handicap (TB) $75,000 (Dirt) 1,400m
6.35pm: Al Wasl Stakes – Conditions (TB) $60,000 (Turf) 1,200m
7.10pm: UAE Oaks – Group 3 (TB) $150,000 (D) 1,900m
7.45pm: Blue Point Sprint – Group 2 (TB) $180,000 (T) 1,000m
8.20pm: Nad Al Sheba Trophy – Group 3 (TB) $200,000 (T) 2,810m
8.55pm: Mina Rashid – Handicap (TB) $80,000 (T) 1,600m
Zimbabwe v UAE, ODI series
All matches at the Harare Sports Club
- 1st ODI, Wednesday, April 10
- 2nd ODI, Friday, April 12
- 3rd ODI, Sunday, April 14
- 4th ODI, Sunday, April 16
Squads:
- UAE: Mohammed Naveed (captain), Rohan Mustafa, Ashfaq Ahmed, Shaiman Anwar, Mohammed Usman, CP Rizwan, Chirag Suri, Mohammed Boota, Ghulam Shabber, Sultan Ahmed, Imran Haider, Amir Hayat, Zahoor Khan, Qadeer Ahmed
- Zimbabwe: Peter Moor (captain), Solomon Mire, Brian Chari, Regis Chakabva, Sean Williams, Timycen Maruma, Sikandar Raza, Donald Tiripano, Kyle Jarvis, Tendai Chatara, Chris Mpofu, Craig Ervine, Brandon Mavuta, Ainsley Ndlovu, Tony Munyonga, Elton Chigumbura
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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UAE currency: the story behind the money in your pockets
BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
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Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
Power: 450hp
Torque: 700Nm
Price: From Dh450,000, Autograph model from Dh510,000
Available: Now
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SPECS
Nissan 370z Nismo
Engine: 3.7-litre V6
Transmission: seven-speed automatic
Power: 363hp
Torque: 560Nm
Price: Dh184,500
Conservative MPs who have publicly revealed sending letters of no confidence
- Steve Baker
- Peter Bone
- Ben Bradley
- Andrew Bridgen
- Maria Caulfield
- Simon Clarke
- Philip Davies
- Nadine Dorries
- James Duddridge
- Mark Francois
- Chris Green
- Adam Holloway
- Andrea Jenkyns
- Anne-Marie Morris
- Sheryll Murray
- Jacob Rees-Mogg
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- Lee Rowley
- Henry Smith
- Martin Vickers
- John Whittingdale
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Indika
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Zayed Sustainability Prize
West Indies v India - Third ODI
India 251-4 (50 overs)
Dhoni (78*), Rahane (72), Jadhav (40)
Cummins (2-56), Bishoo (1-38)
West Indies 158 (38.1 overs)
Mohammed (40), Powell (30), Hope (24)
Ashwin (3-28), Yadav (3-41), Pandya (2-32)
India won by 93 runs
War
Director: Siddharth Anand
Cast: Hrithik Roshan, Tiger Shroff, Ashutosh Rana, Vaani Kapoor
Rating: Two out of five stars
MATCH DETAILS
Chelsea 4
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Ajax 4
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Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
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